PSU bank stocks tumble; Bank of India tanks over 8 pc

Reversing early gains, the 30-share BSE Sensex tumbled 2,370.36 points or 2.88 per cent to slide below the 80,000-mark at 79,899.42 in afternoon trade after Finance Minister Nirmala Sitharaman on Sunday proposed an increase in the Securities Transaction Tax STT on derivatives.

PSU bank stocks ended sharply lower on Sunday, in-line with a steep decline in the equity market on the Budget day. Shares of Bank of India tanked 8.41 per cent, Indian Bank tumbled 7.30 per cent, Bank of Maharashtra dropped 7.21 per cent, Bank of Baroda declined 6.60 per cent and Union Bank of India plunged 6.31 per cent on the BSE. The stock of State Bank of India dived 5.61 per cent, Canara Bank lost 4.38 per cent, Indian Overseas Bank (3.40 per cent), Punjab National Bank (2.92 per cent), Central Bank of India (2.67 per cent) and UCO Bank (2.19 per cent). The BSE PSU Bank index tumbled 285.43 points or 5.60 per cent to 4,807.19. Reversing early gains, the 30-share BSE Sensex tumbled 2,370.36 points or 2.88 per cent to slide below the 80,000-mark at 79,899.42 in afternoon trade after Finance Minister Nirmala Sitharaman on Sunday proposed an increase in the Securities Transaction Tax (STT) on derivatives. The benchmark gauge ended at 80,722.94 down 1,546.84 points or 1.88 per cent. State Bank of India was the biggest laggard among the 30-share BSE Sensex firms. In her Budget speech for 2026-27, Sitharaman said the STT on futures contracts would be raised to 0.05 per cent from 0.02 per cent. ''The absence of strong, immediate Budget triggers-such as aggressive credit growth incentives, PSU bank recapitalisation, or clear rate-sensitive measures-led to sharp profit-booking across banking counters,'' Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said. The government is likely to borrow Rs 17.2 lakh crore in the next financial year to fund its fiscal deficit projected at 4.3 per cent of the GDP. The government had estimated a gross borrowing Budget of Rs 14.80 lakh crore in FY26. The government borrows from the market to fund its fiscal deficit. ''To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore,'' the Finance Minister said while delivering Budget 2026-27. ''Although fiscal prudence is demonstrated with 4.4 per cent fiscal deficit achieved for FY26 and 4.3 per cent projection for FY27, the larger than expected gross borrowing plan of Rs 17.2 lakh crore may have the market worried in spite of net borrowing number of Rs 11.7 lakh crore being in line,'' Vishal Goenka, Co-Founder of IndiaBonds.com, said.

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